Quick Facts

• True brand loyalty in beauty dropped to 29% in 2025, a 5-point decline from the prior year, despite overall loyalty hitting 42%.
• Customer acquisition costs in health and beauty average $127, making retention the primary path to profitability.
• 60% of consumers switched from a brand they were loyal to in 2025 due to cost, according to industry data.

Beauty brand loyalty is cracking. Even as the share of consumers who describe themselves as loyal to beauty brands climbed to 42% in 2025, the deeper metric tells a different story. True loyalty, defined as trust-based, repeat commitment to a single brand, fell to 29% that same year. That five-point drop from 2024 reflects a market where endless product options, rising prices, and viral alternatives are pulling customers away faster than brands can hold them.

The numbers put real pressure on operators. According to Business of Fashion, customer acquisition in the health and beauty category costs an average of $127 per customer. With margins already tight, a brand’s first sale frequently loses money. Sustainable profitability depends entirely on the second, third, and tenth purchase. Retaining an existing customer costs five times less than acquiring a new one.

The iOS 14.5 privacy update accelerated this shift. Mobile tracking and targeting became less reliable, and paid acquisition grew less efficient across the board. Giovanna Diez, Senior Manager of CRM and Loyalty at Naturium, described the post-iOS environment as a turning point that made retention essential, not optional.

What Loyalty Programs Are Delivering

The retailers that built loyalty infrastructure early are now benefiting from it at scale. Ulta Beauty’s program has 44.6 million active members and accounts for over 95% of total sales. The company is targeting 50 million members by 2028. Sephora’s Beauty Insider program, with more than 40 million members globally, drives 80% of North American sales and has produced a 22% increase in cross-sell revenue alongside up to a 51% lift in upsell revenue.

Industry-wide, 83% of consumers say belonging to a loyalty program influences their repurchase decision. Members of structured loyalty programs spend 43% more than non-members, and programs deliver 5.2 times revenue relative to costs. The global loyalty program market is projected to reach $93.79 billion in 2025, growing at 15.9% annually.

The Rules Have Changed

First-party data is now a competitive asset. With third-party cookies declining, brands that collect behavioral data through quizzes, loyalty programs, email, and SMS hold a structural advantage. In 2025, 58% of brands named personalization their top loyalty program priority. A Deloitte study found that 73% of consumers want rewards tailored to their purchase history rather than generic discounts.

Owned channels have become the retention moat. Email and SMS continue to outperform paid media on ROI. Beauty shoppers are twice as likely to convert after receiving an SMS cart abandonment message and 2.6 times more likely to convert after a price drop alert via SMS, according to Listrak’s 2025 Beauty and Fashion Benchmark Report.

The role of DTC has shifted. It is no longer the primary growth engine. Brands are repositioning their direct channels as relationship hubs where they tell the full brand story, reward loyal customers, and test new products. Scaling DTC profitably now requires genuine pricing power and disciplined retention strategy.

The TikTok Problem

A new category of loyalty has emerged from social media, and it is fragile. Trend-driven consumers buy into viral products but lose interest fast. According to industry data, 29% of consumers disengage from a brand as soon as its product stops trending. Brands that rely on social buzz to drive volume face a retention cliff once the moment passes.

Programs that move beyond points toward lifestyle membership are positioned to hold customers longer. The distinction matters: points systems reward transactions, while membership models build emotional connection through community, shared values, and experiences that extend beyond the purchase.

For operators, the math is straightforward. Paid acquisition is expensive and getting harder to optimize. The brands that invest now in owned data, personalized retention programs, and SMS and email infrastructure will carry a structural cost advantage into the next three years.

Read more: The New Rules of Beauty Brand Loyalty